With eleven days before the August 2 deadline, talks to negotiate a deal to raise the debt limit have broken down, leaving the United States on the cusp of a possible economic catastrophe.
"We have run out of time," Mr. Obama said in acknowledging the breakdown.
House Speaker John Boehner walked away from negotiations Friday, complaining that Mr. Obama would not agree to Republican demands that the deal not include any tax increases. Shortly after Boehner made his decision public, Mr. Obama, appearing frustrated, appeared before reporters to explain what had been on the table and hammer Boehner for walking away from an "extraordinarily fair deal."
The deal on the table, as Mr. Obama laid it out, included more than $1 trillion in cuts to domestic and defense discretionary spending, as well as $650 billion in cuts to entitlement programs - Medicare, Medicaid and Social Security. He said he asked for approximately $1.2 trillion in revenue increases that he said would have come from eliminating loopholes and deductions and engaging in broad tax reform, not hiking tax rates.
The deal, he said, called for less in tax increases than the deal worked out by the bipartisan "Gang of Six" negotiators, while including as much in discretionary savings. He said if the deal was unbalanced, "it was unbalanced in the direction of not enough revenue."
